CPS Research Fellow Michael Johnson has followed up on his recent letter calling for a merger of local government pensions funds by writing for the Financial Times on the issue.
"A recent series of letters in the FT on the Local Government Pension Scheme (LGPS) brings to the fore an issue the pensions industry has repeatedly tried to ignore: the scaling up of pension funds. This is not in the industry’s interests, but is very much in the interests of scheme members.
There is mounting evidence that sub-scale schemes lead to sub-optimal consumer outcomes, yet of the UK’s 46,540 trust-based DC schemes, 44,000 have fewer than 12 members, and 38,300 have fewer than four. The average UK scheme size is 2,500 members; contrast this with Australian schemes that average 26,000 members."
To view the full article, visit the Financial Times website (£).